Note 3 - Business Acquisitions

12 Months Ended

Dec. 31, 2015

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

3. Business Acquisitions

Effective October 1, 2015, pursuant to the terms and conditions of the Amended and Restated Agreement and Plan of Merger, dated as of June 14, 2015 (the "Merger Agreement"), between Standard Pacific and Ryland, Ryland merged with and into Standard Pacific (the "Merger"), with Standard Pacific continuing as the surviving corporation.  At the same time: (i) Standard Pacific changed its name to "CalAtlantic Group, Inc." ("the Company") and effected a reverse stock split such that each five shares of common stock of Standard Pacific issued and outstanding immediately prior to the closing of the Merger were combined and converted into one issued and outstanding share of common stock of the Company ("Common Stock"), (ii) MP CA Homes, LLC ("MatlinPatterson"), the sole owner of the Company’s outstanding Series B Preferred Stock, converted all of its preferred stock to Common Stock, and (iii) each outstanding share of Ryland common stock, stock options and restricted stock units were converted into the right to receive, or the option to acquire, as applicable, 1.0191 shares of Common Stock. Cash was paid in lieu of all fractional shares.

The following table summarizes the components of Common Stock outstanding immediately following the Merger as of October 1, 2015:

	As of October 1, 2015		Split/Exchange Ratio		As Adjusted October 1, 2015
Common Stock - Standard Pacific		277,220,324		5		55,444,065
Common Stock - Ryland		46,856,558		1.0191		47,751,518
Accelerated Vesting of Ryland Equity Awards		234,751		1.0191		239,235
Preferred Stock - Standard Pacific		87,812,786		5		17,562,557
Fractional Shares Paid Out		—				(1,041	)
Total		412,124,419				120,996,334

Based on an evaluation of the provisions of ASC Topic 805, Business Combinations, ("ASC 805") Standard Pacific was determined to be the acquirer for accounting purposes. Under FASB ASC Topic 805, Standard Pacific is treated as having acquired Ryland in an all-stock transaction for an estimated total purchase price of approximately $2.0 billion. The calculation of the total purchase price is based on the outstanding shares of Ryland Common Stock as of the acquisition date multiplied by the 1.0191 exchange ratio and multiplied by the Company’s split-adjusted share price of $40.46 on the date of acquisition. The purchase price also includes $30.6 million of consideration representing the fair value of replacement equity awards attributable to service prior to the closing of the Merger. The total purchase price is calculated as follows (dollars in thousands, except per share amounts).

Number of shares of CalAtlantic common stock issued to Ryland shareholders		47,989,812
Opening price per share of CalAtlantic common stock	$	40.46
Consideration attributable to common stock		1,941,668
Consideration attributable to CalAtlantic equity awards in exchange for Ryland equity awards		30,616
Total purchase price	$	1,972,284

The estimated total purchase price was preliminarily allocated to Ryland's assets and liabilities based upon fair values as determined by the Company, as follows (in thousands):

Cash and cash equivalents	$	268,517
Inventories		2,404,765
Investments in unconsolidated joint ventures		13,821
Deferred income taxes		158,407
Homebuilding other assets		76,857
Financial services assets, excluding cash		144,889
Goodwill		933,360
Total assets		4,000,616
Accounts payable and accrued liabilities		(496,125	)
Secured project debt and other notes payables		(22,213	)
Senior notes payable		(1,385,375	)
Financial services liabilities		(124,619	)
Total purchase price	$	1,972,284

The purchase price accounting reflected in the accompanying financial statements is preliminary and is based upon estimates and assumptions that are subject to change within the measurement period (up to one year from the acquisition date pursuant to ASC 805). The measurement period remains open pending the completion of valuation procedures related to the acquired assets and assumed liabilities. The $933.4 million allocated to goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed, and it is not deductible for income tax purposes. As of the end of the period covered by this annual report on Form 10-K, we have not yet finalized the allocation of goodwill to our reporting units.

Ryland's results of operations, which include homebuilding revenues of $772.3 million and net income of $1.8 million, are included in the accompanying consolidated statements of operations for the period of October 1, 2015 through December 31, 2015. Net income includes adjustments for amortization expense of the acquired intangible assets, inventory step-up and restructuring expenses.

The following presents summarized unaudited supplemental pro forma operating results as if Ryland had been included in the Company's Consolidated Statements of Operations as of the beginning of the fiscal years presented.

	Year Ended December 31,
	2015		2014
	(Dollars in thousands, except per share amounts)
Home sale revenues	$	5,280,297	$	4,922,721
Net income	$	321,239	$	387,123
Income per share:
Basic	$	2.65	$	3.19
Diluted	$	2.32	$	2.80

The supplemental pro forma operating results have been determined after adjusting the operating results of Ryland to reflect additional amortization that would have been recorded assuming the fair value adjustment to intangible assets had been applied beginning January 1, 2014. Certain other adjustments, including those related to conforming accounting policies and adjusting acquired inventory to fair value, have not been reflected in the supplemental pro forma operating results due to the impracticability of estimating such impacts.

Acquisition and integration expenses related to the Merger comprised of the following:

	Year Ended December 31, 2015
	(Dollars in thousands)
Severance and personnel costs	$	38,970
Professional service, real estate related, and other expenses		13,066
Total	$	52,036

The acquisition and integration costs are expensed as incurred and are presented in other income (expense) within the accompanying consolidated statements of operations.